Summary Our senses convert environmental stimuli into electrical signals that are ultimately interpreted by the brain to guide our behavioral decisions. The conversion of stimuli relies on the ion channels expressed in sensory cells, and their properties thus determine how we perceive our environment. Olfactory receptor neurons (ORNs) in the nasal cavity recognize odorants and, unlike other sensory neurons such as photoreceptors and hair cells, are in direct contact with the external environment, protected only by a thin mucus layer. Olfactory cilia, the cellular compartment that contains the machinery that transduces odorants, must survive in this environment while remaining functional, adding extra demands on membrane integrity and function. The initial event of an odor molecule binding to an odorant receptor in the ciliary membrane leads, via activation of adenylyl cyclase, to opening of the olfactory cyclic-nucleotide gated (CNG) channel that allows Ca2+ influx, which in turn activates an excitatory Ca2+-activated Cl- channel, further depolarizing the neuron. This two-tiered sensory transduction mechanism based on one cationic and one anionic channels, is unique to ORNs and highly conserved across all vertebrates. Both the reason why ORNs use this two-stage ion channel system in general and why a combination of cation and anion conductances in particular is used to perceive odorants are unclear, as is the role of the Ca2+-activated Cl- channel. Only in 2009 was the molecular identity of the olfactory Ca2+-activated Cl- channel determined to be anoctamin 2 (Ano2), and despite a knockout model being available, the roles of Ano2, and therefore also of the CNG channel, remain unclear. We propose to use an Ano2-knockout mouse, electrophysiological and molecular approaches to define how these two ion channels shape the odorant-induced response. We will characterize which specific aspects of the response (adaptation, response reliability, action potential coding, etc.) are determined by a single ion channel or jointly by both. In addition, because the two channels must function in the constraints of the ciliary membrane, we will investigate how the channels rely on membrane constituents for their function and how altered membranes leads to detrimental olfactory function. By examining how the two-tiered sensory transduction mechanism of a cationic and an anionic ion channel operates seamlessly as a dual-component system, we will address fundamental questions in olfaction that have remained unanswered for the past 25 years. The long-term goal of this proposal is to establish how ORNs use their signal transduction in general and their ion channels in particular to reliably encode odorant stimuli, how transduction functions within the constraints of the ciliary membrane, and how this ultimately determines how odorants are perceived.